Brian W. SteinbachAlthough not widely reported, effective January 1, 2016, the District of Columbia joins New York City and San Francisco in requiring employers of 20 or more employees to offer qualified transportation benefits.  By that date, covered D.C. employers who do not already do so must offer one of three transit benefit options.

Under the Sustainable DC Omnibus Amendment Act of 2014, Title III, Subtitle A, “Reducing Single Occupancy Vehicle Use by Encouraging Transit Benefits,” at D.C. Code §32-151, et seq., covered employers must “provide at least one of the following transportation benefit programs to its employees:”

  1. A benefit program that allows employees to elect to set aside pre-tax funds each month to pay for their “commuter highway vehicle [van pool], transit or bicycling” commuting costs, consistent with Section 132(f)(a)(A), (B), and (C) of the Internal Revenue Code;
  2. An employer-paid benefit program in which the employer supplies, at the employee’s election, a transit pass or reimbursement of vanpool or bicycling costs in an amount at least equal to the purchase price of a transit pass for an equivalent trip; or
  3. Employer-provided transportation at no cost to the covered employee in a vanpool or bus operated by or for the employer.

The penalty for failing to offer at least one of these benefit programs is a civil fine pursuant to the Civil Infractions Act, which depending upon the class of infraction ranges from $50 to $2,000 for the first offense.

The D.C. Department of Transportation, in conjunction with other organizations, has engaged in considerable promotion of these requirements. The Employer Services section of its website “offers complimentary assistance every step of the way to make offering commuter benefits easier than ever.” This includes an “Employer Transit Benefits Toolkit” that provides guidance on the steps to implement a compliant program. The Employer Transit Benefits Toolkit has a specific checklist to assist in implementing any of the three options provided under the law. Other useful information available at the Employer Services site includes newsletters with information on compliance assistance and periodic free seminars. The Washington Metropolitan Transit Authority (WMATA) also offers information and seminars on using its “SmartBenefits” program to comply with the Act’s requirements here.

The key takeaway is that covered D.C. employers should move quickly to have a program in place by January 1, 2016.